Ringing Out 2016 in QuickBooks

2017 is just around the corner. Now’s the time to do your end-of-year QuickBooks tasks.

Since early January of this year, you’ve been faithfully creating new records, entering transactions, and recording payments. You’ve run basic reports. You’ve done your collection duties. You may have paid employees and submitted payroll taxes.

Now the end of the year is rapidly approaching. In the midst of holiday get-togethers, gift shopping, and perhaps preparing for travel, you probably have a list of work tasks that must be completed by December 31.

Is your annual QuickBooks wrap-up on that list? It should be. Here are some of the things we suggest you fit into your busy schedule sometime this month.

Create and send year-end statements.

As your customers wrap up 2016, too, it’s good to send statements to past-due accounts.

In an ideal world, all of the invoices that are currently due would be paid off by the end of the year. We all know that that’s not usually the reality. Two reports can help you here: the A/R Aging Summary and Open Invoices.

Give everyone a chance to clear their accounts before December 31 by sending statements. Click Statements on the Home page (or Customers | Create Statements) to open the window pictured above.

You have multiple options here that are fairly self-explanatory. The screen above is set up to create statements for all customers who have an open balance as of the date you select, but not for inactive customers or those with a zero balance or no account activity. That way, no one who’s paid in full to date will receive a statement. Of course, if you didn’t want statements created for anyone who’s less than 30 days past due, you’d click in the box in front of Include only transactions over and enter a “30” in the following field. Questions about all of this? Give us a call.

Tip: You can also find out who’s overdue by clicking on the Customers tab in the left vertical pane to open the Customer Information screen. Click on the down arrow to the right of the field just below Customers & Jobs. QuickBooks provides several filters for your list.

Reduce your inventory.

Want to discount all or selected items in your inventory by the same percentage or amount? Open the Customers menu and click Change Item Prices. We can work with you on the whole item pricing process.

The week between Christmas and New Year’s Day might be a good time to sell excess inventory by having a sale. If you only sell a few products, you probably know what hasn’t sold well in 2016. If your stable of products is larger, you can run QuickBooks reports like Inventory Stock Status by Item and Sales by Item Detail to identify your slow-sellers and discount them. You may need to filter your reports to see the right data. Talk to us about customization options if you’re unsure of this.

Clean up your contact lists.

If you don’t maintain your customer and vendor lists, you’ll eventually start wasting time scrolling through them when you enter transactions. So this would be a good time to designate those contacts that you’ve not dealt with in 2016 as Inactive (you can delete their records entirely, but we advise against that). Simply open a Customer record, for example, and click the small pencil icon in the upper right to edit it. Click on the box in front of Customer is inactive.

Send holiday greetings to customers and vendors.

It’s getting a little late to send a holiday greeting/thanks-for-your-business note in December. Consider doing this in January (Best Wishes for a Successful 2017!) when your customers’ and vendors’ lives have slowed down a bit. You’re less likely to get lost in the crowd. If your lists are short enough, personalize these cards as much as possible. At least sign them by hand if you can.

Tip: You can print customer labels for your cards directly from QuickBooks. Open the File menu and then click Print Forms | Labels.

Run advanced reports.

Here’s where we come in. If we’re not already creating and analyzing QuickBooks’ advanced financial reports (found in the Accountant & Taxes submenu of Reports) monthly or quarterly, talk to us about it. They’re important, and they give you insight that you can’t get on your own. This is another activity that can spill into January.

We’d like to thank you for being a client this year, and to wish you a successful 2017!

Stock image courtesy of FreeDigitalPhotos.net

Last-Minute 2016 Tax Tips

April 17, 2017, sounds like it’s a long way off. But December 31, 2016, isn’t. If you haven’t given much thought to your 2016 income tax obligation, it’s time.

The holiday season has begun, and the end of the year is approaching. You probably have personal and business to-do lists a mile long. Gifts to buy. Friends and family to visit. Gatherings to plan, and customers to thank for another year of their patronage.

Somewhere in there, though, we highly recommend that you add a few more items related to your 2016 income taxes. There’s still time to reduce your financial obligation to the IRS.

Ask yourself these questions:

Have you been generous enough this year?

You surely know that you can deduct cash and non-cash contributions that you make to qualified organizations. This includes things like churches, nonprofit schools and hospitals, veterans’ groups, and the Salvation Army. You can also claim out-of-pocket expenses incurred if you did volunteer work for a qualified organization.

The IRS has many rules—and exceptions—governing these donations, so if you’re not sure about the status of a group or institution, ask. In some cases, you may need to get a letter from that organization documenting your contribution.

Tip: You can also consult an online IRS tool called Exempt Organizations Select Check.

You may also be able to “gift” money or property worth up to $14,000 ($28,000 for a married couple) to someone without having to pay the IRS’s gift tax. Again, there are numerous rules and exceptions.

Have you paid all estimated taxes due to date?

By now, you should have made three estimated tax payments for 2016; the final one will be due in January 2017. If you forgot, or if you fear you may not have paid enough, the IRS will accept those quarterly payments any time, even if they occur outside of the stated deadlines (though you may face a penalty).

Have you been tracking your company’s income and expenses carefully?

Here’s where we can pitch in a lot. If you let us work with you throughout the year—starting now, even—we can help you with the complex financial reports that you need to really understand the status of your company’s finances.

You should be creating reports regularly on your own to keep an eye on things like aged receivables and payables, sales, inventory levels, and expenses. If you’re using an accounting application, this is easy. You can also set up Excel to display report data. And you can even pull together numbers manually, but it’s not a simple, automated process.

Bottom line: We know what information you need in order to stay on top of your income tax obligation year-round and avoid filing-time surprises.

Have you generated a lot of revenue without a lot of expenses to offset it?

We have two suggestions here. First, have you been putting off a major acquisition like equipment, vehicles, property, or technology tools? If so, consider following through on one or more of those purchases before December 31. Second, can you defer some income to 2017? Call us for tips on both of those tax-savings ideas.

Have you been contributing regularly to your retirement plan?

The money you’ve been putting away to use after you stop working is financially advantageous in two ways. You’ll be more secure in your retirement years, of course. But depending on the type of plan you’re enrolled in, it could make good income tax sense to max out your contributions before the end of 2016. Don’t know the limits of your particular plan, or not sure how your taxes are affected? We can help.

Have you been following the possible tax law changes for 2016?

Much of this information, of course, isn’t final yet. And it’s hard to tell from just watching the TV news or reading the newspaper just what might have impact on your 2016 income tax obligation. We follow tax law closely, and we know what you might be able to anticipate.

The best time to start planning for the next year’s income taxes, frankly, is any time. November and early December, though, are especially critical in terms of taking any action you need to before December 31. So let us help you minimize your tax obligation for this year.

Stock images courtesy of FreeDigitalPhotos.net

Creating Reports in QuickBooks, Part 2

Last month, we discussed QuickBooks’ report Preferences and The Report Center. We’ll look at report customization this month.

QuickBooks makes your bookkeeping faster, safer, and more accurate than what you could do using a manual system. Still, you may occasionally tire of your daily tasks. You want to know what all of these forms and records mean in terms of your overall financial health. You want to see reports.

The actual mechanics of creating reports in QuickBooks are fairly straightforward. You can go to the Report Center, make a selection, maybe change the date range, and voila! Your company’s related data appears in neat rows and columns.

You may be able to get some of the information you need by simply changing the date range on a QuickBooks report.

But perhaps you to see different columns than what QuickBooks’ report templates include. Further, you might like to filter your output for more meaningful, targeted analysis. And frankly, some of QuickBooks’ reports—particularly those included in the categories Company & Financial and Accountant & Taxes—can be a little advanced for the average small businessperson with little bookkeeping experience. They’re easy to run, but difficult to understand.

So we strongly encourage you to let us run these more complex reports, like the Balance Sheet, for you on a regular (monthly or quarterly) basis. They can provide valuable insight as you continue to make critical business decisions.

But we don’t want to discourage you from working with QuickBooks’ reports on your own. You could run A/R Aging Detail, for example, to keep an eye on past-due payments, or Unpaid Bills Detail to see where you stand with your own financial obligations.

Make Reports Yours

Sometimes, QuickBooks’ own report output is a bit too broad for your needs. So the program provides sophisticated customization options. You can work with these to narrow down and shape the data that appears in your reports.

First, columns. Building reports from scratch would be too time-consuming and frustrating for you to do all of the time. And it’s unnecessary, since QuickBooks provides templates for its reports, sets of columns and data filters that would serve some businesses well, but which can be modified by each user.

Try this. Open the Profit & Loss Detail report and click on the Customize Report button in the upper left corner. The Modify Report window opens.

QuickBooks lets you modify the columns that appear in reports.

The Display tab should be highlighted. Change the Report Date Range if necessary by clicking on the down arrow to the right of the Dates field. You can also create your own custom date range by deleting the dates in the From and To fields and entering new ones, or by clicking on the small calendar icons and clicking on the desired dates.

Warning: Do you understand the difference between running reports as either Accrual or Cash? This is important. If you don’t, let’s get together to go over some basic report concepts.

It’s easy to change the default columns that appear in reports. You can either enter a column label in the Search Columns box or scroll down the list of all possible labels. Click in the space in front of the ones you want to include, and click on existing checkmarks if you want to remove those labels. You can also designate a sort order, either Ascending or Descending.

If you want to work with the Advanced options, or if you come across a Display screen that puzzles you (depending on the report, you may have some complex choices), let us know.

QuickBooks report Filters screen

When you’re done here, click on the Filters tab. This is a powerful element of QuickBooks report customization. You can limit your report output to data that meet certain criteria. In the image above, for example, you can tell QuickBooks which subset of Accounts should be included. Click on the Billing Status filter, and you can limit the results to Any, Not Billable, Unbilled, or Billed. You get the idea.

You can apply multiple filters to a report. Every one you select will appear in the list under Current Filter Choices.

We’ll skip the Header/Footer and Fonts & Numbers tabs, since these are primarily cosmetic options you can explore on your own. But you can see from this brief overview how you can use many QuickBooks reports as is or customize them extensively. And we do recommend that you work with reports regularly, both on your own and with us. The insight they provide can help your company grow and flourish instead of just getting by.